Investors pour $18.3B into hedge funds in March

“The rate spike in May 2013 has proven to be the inflection point when investor interest shifted from credit to equity hedge funds,” the report adds. “In the two years leading up to that point, investors allocated $80.7 billion into credit strategies while redeeming $70.6 billion from equity funds. In the nine months since, equity inflows have been more than double those into credit strategies and total AUM in equity strategies surpassed credit funds in Q1 2014 for the first time in 18 months.”

Among the survey’s additional findings:

• Credit fund flows totaled $9.6 billion in the first quarter of 2014;
• Event-driven funds received the largest allocations in March and were second in terms of investor interest in Q1 2014, behind long/short equity. Inflows into activist strategies exceeded $6 billion in new capital in the first quarter;
• During the year past, investors pulled $13 billion from macro strategies, which continue to suffer from underperformance;
• At the end of the first quarter of 2013, assets under management of managed futures dipped to its lowest level since mid-2004; and
• Investor sentiment toward emerging markets exposure has “cooled” following investment losses in China and “tensions” in Europe connected with the crisis in Ukraine. Emerging market flows increased during the quarter.